Matthew Newton, an analyst at eToro, said in an email: "The crypto market seems to have hit panic mode, with prices falling significantly across the board. As we can see in the case of ether, investors seem to be increasing liquidations of their ICO holdings, with significant drops in price and increased volumes."

As of Tuesday morning London time, the value of the overall cryptocurrency market had fallen by about 10% over the past 24 hours, according to CoinMarketCap.com, from $218 billion to $193 billion.

Bitcoin, the largest cryptocurrency by value, dropped below the psychologically significant level of $6,000 early in the session before fighting back. Bitcoin was down 3.7% to $6,020.24 at 4.24 p.m. BST (11.24 a.m. ET).

Other major cryptocurrencies were suffering similar drops at the same time:

"If an ETF doesn't see the light in the coming weeks expect to see a further selloff, as it suggests regulators will continue to fight against bringing cryptocurrencies into the mainstream," Hussein Sayed, the chief market strategist at FXTM, said in an email on Tuesday morning, adding that a break below $5,770 for bitcoin would "intensify selling pressure as it's the only major support still standing."

The slump comes as emerging-market currencies are selling off, spooked by last week's collapse of the Turkish lira against the dollar. Neil Wilson, the chief market analyst at Markets.com, said in an email that this coincidence "puts paid to the notion of cryptos as a safe haven play."

"Ultimately USD and US Treasury notes are the only real safe harbour," Wilson said.